The Sarbanes-Oxley Act of 2002 was one of the most sweeping and controversial laws ever to hit a statute book – but what has the backlash been for corporate America? Business Management’s Julian Rogers investigates…
The fallout from the Enron and Worldcom scandals has been massive and far-reaching. Apart from the jail terms handed down to senior executives involved in the accounting cover-ups, public companies’ accounts have been put under the spotlight like never before. The tough measures have created new standards for accountability, and despite claims by critics of the Sarbanes-Oxley (SOX) Act that the compliance costs outweigh the actual benefits, the authorities have been determined to crack down on financial fraud and restore the confidence of disgruntled investors. Since the Act’s introduction, firms have seen compliance bills hit their balance sheets hard as costs have mushroomed, with a recent survey conducted by AMR Research finding that companies are expected to shell out US$6 billion on SOX compliance in 2006 alone.
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